Brazil’s government should have a more flexible system for setting annual fiscal targets but should enforce responsibility by also setting a ceiling on government spending, Finance Minister Nelson Barbosa said Thursday. Barbosa spoke at the inauguration of a new 92-member National Economic and Social Development Council, a group of mainly private sector leaders who will offer policy advice to the government. Currently, Brazil’s government is holding to a 2016 fiscal target designed to produce a primary surplus equal to 0.5% of gross domestic product. The target can only be shifted by an act of Congress. Barbosa said the target should be set in accordance with a “band,” or sliding scale, that could be adjusted if revenues rise or fall unexpectedly. He also proposed creation of a legally-mandated ceiling on annual increases in government spending in order to enforce fiscal responsibility.
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